Amgen stock sank Thursday after the biotech company unveiled early results for its obesity treatment.
Amgen is coming from behind in this area, trailing Novo Nordisk and Eli Lilly. In a Phase 1 study, patients who received the highest dose of a drug called AMG 133 lost 14.5% of their body weight over 12 weeks.
The results are promising enough that Amgen hopes to start a midstage study early next year, says Narimon Honarpour, Amgen's vice president of general medicines. There are more than 600 million people in the world with obesity, including more than 40% of the U.S. population, Honarpour told Investor's Business Daily. So, there's plenty of room for multiple players, he said.
"It's going to be, and is, currently a very large market," he said. "Two years ago, we didn't have really any effective therapies for notable weight reduction except bariatric surgery. And now, finally, the pharmaceutical industry and biotech has answered that call with some great new medicines. We think this, in fact, should create more opportunity to get into the market."
But the results didn't buoy Amgen stock as investors likely compared its results with those of Novo and Lilly. Their drugs led to greater weight loss, though over longer periods of time. Amgen shares fell a fraction to 285.94. Shares soared to a high point at 296.67 last month. Since then, they have backed off slightly. Lilly dipped a fraction as Novo stock rose 1.2%.
Amgen Stock: Targeting Two Hormones
Amgen's medicine differs from Novo Nordisk's already approved drug, Wegovy. Wegovy stimulates a hormone called glucagon-like peptide-1, or GLP-1, to help reduce weight.
The experimental obesity treatments from Lilly and Amgen both target GLP-1 as well as the glucose-dependent insulinotropic polypeptide receptor, or GIPR. Amgen's medicine works to stimulate GLP-1 and block GIPR. Research suggests blocking GIPR can lead to strong weight loss.
"We have a molecule that, by design, is pumping the brakes on one pathway, the GIP receptor, while pressing the accelerator for the other, the GLP receptor," he said.
Notably, the way Amgen constructed its experimental obesity treatment means it lingers in the body longer. So, patients don't need as many injections. On one side of Amgen's study, patients received a single injection at the beginning. The other side received multiple injections. That group lost 7.2% of their body weight at the lowest dose and 14.5% at the highest dose.
A Quicker Move Into Obesity Treatment
Amgen is also taking the shorter route to an obesity treatment, skipping the diabetes tract. Amgen stock analysts are closely watching this strategy.
The backbone behind Novo's Wegovy is called semaglutide. Semaglutide also sells as diabetes treatments called Ozempic and Rybelsus. Lilly's tirzepatide is already approved as a diabetes drug called Mounjaro. Analysts expect tirzepatide to gain approval as an obesity drug in 2024. Meanwhile, Wegovy is still experiencing supply challenges. The company hopes to have those resolved early next year.
Lilly tested tirzepatide over 72 weeks. Patients lost, on average, 16% to 22.5% of their body weight, depending on the dosage. That translated to 35 to 52 pounds. In Novo's final study, Wegovy recipients lost an average of 17% body weight over 68 weeks. Both require weekly injections.
In Phase 2 testing, Amgen hopes to run a longer test to determine the full potential of AMG 133. So far, the side effects appear mostly mild and transient. The most common problems were nausea and vomiting, which tend to be a side effect of GLP-1 treatments, Honarpour said.
Still, Amgen stock is well above its key moving averages and has a strong Relative Strength Rating of 94, according to IBD Digital. This puts shares in the top 6% of all stocks in terms of 12-month performance.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
